Tembo Global’s record shows five years of unqualified audit opinions from FY2020-21 through FY2024-25, yet the numbers tell a different story: revenue has grown to ₹1,090 crore in FY26 while cumulative operating cash flow over seven years is negative ₹149 crore.
Key findings
- Operating cash flows are negative and decoupled from profit
Major- In FY26, operating cash flow was negative ₹90.22 crore while profit was ₹98.23 crore, a ratio of -0.92x; in FY25, cash flow was negative ₹77.43 crore against profit of ₹50.97 crore, a ratio of -1.52x. The auditor’s CARO report for FY25 states the company “has used funds raised on short-term basis for long-term purposes”. Short-term borrowings made up 49% of total borrowings, ₹186 crore of ₹377 crore, and capital work-in-progress stood at ₹68.31 crore while management stated ₹300 crore had already been spent on a solar project with a total cost of around ₹600 crore. - CARO reports reveal recurring operational control weaknesses
Major- Statutory audit opinions were unqualified every year from FY2020-21 through FY2024-25, but CARO reports show a pattern: inventory physical verification “needs to be upgraded to be commensurate with nature and size of the business,” prescribed cost records were “in the process of compilation,” and quarterly bank returns did not agree with the books. The auditor also reported that short-term funds were used for long-term purposes. For FY2024-25, the auditor included three Emphasis of Matter paragraphs, a special call-out in the audit report, covering expected credit loss on export receivables, conversion of loans to a subsidiary into equity shares pending allotment, and reclassification of commission income. - Three auditors in five years, and accounts signed without a CFO or CS
Major- R A MARU & ASSOCIATES resigned on 3 October 2022, stating the firm was “non peer reviewed” and therefore “ineligible to continue”. M/s R. A. Kuvadia & Co. resigned during FY2024-25, citing expiration of its peer review certificate and “serious health issues including major angioplasty surgery”. The audited financial statements for FY2024-25 were not signed by a CFO or a Company Secretary, as both positions were vacant on the date of Board approval. - Related-party transactions classified as “not at arm’s length” while the board asserts the opposite
Major- The company disclosed contracts with Tembo Exim Private Limited and Saketh Seven Star Industries Limited that were “not at arm’s length basis” in its FY2022-23 Annual Report, while the Board’s Report for the same year stated no materially significant related-party transactions required disclosure. On 14 April 2025, the company sought shareholder approval for related-party transactions up to ₹700 crores for a new solar business, representing 162% of annual consolidated turnover. Loans from directors and related parties rose from ₹36.22 lakhs as at 31 March 2023 to 3.8 crore as at 31 March 2024. - A growing web of subsidiaries with opaque control and dissolved entities
Minor- The group had 7 subsidiaries and 2 associates as of FY25, up from 3 subsidiaries in FY20, yet the AOC-1 statement for FY25 lists no subsidiaries, associates, or joint ventures and contains no financial data for any of them. Saketh Seven Star Industries Private Limited was a 75% subsidiary in FY21; a fresh issue via private placement in September 2021 diluted the company’s holding to 15.40%, converting it from a subsidiary to an associate without the company receiving any consideration. Tembo USA INC was incorporated as a wholly owned subsidiary on 13 December 2019, no foreign investment payment was ever made, and the entity was dissolved on 28 May 2022.
What to watch
- FY2025-26 CARO report. Whether the adverse finding on short-term funds used for long-term purposes repeats, given the FY2024-25 finding reversed a clean FY2022-23 position (D1 period: FY2024-25).
- FY2025-26 financial statement signatories. Whether a CFO and Company Secretary have been appointed and sign the accounts, given both positions were vacant at the time of FY2024-25 Board approval.
- Statutory auditor appointment. Shareholder vote on the appointment of M/s Karta and Company as statutory auditor at the 15th AGM, as proposed in the FY2024-25 Annual Report.
- Related-party transaction approvals. Outcome of shareholder vote on material RPT approvals sought on 14 April 2025 for transactions up to 162% of annual consolidated turnover.
- Corporate guarantees. Utilisation and repayment of corporate guarantees of ₹138.75 crore and ₹157.00 crore disclosed on 2 March 2026.
Bottom line: This is a record of explosive revenue growth built on receivables that are stretching longer and cash flows that remain deeply negative, while the auditor has flagged both revenue recognition and the use of short-term funds for long-term purposes. The governance frame around it is thin: three auditors in five years, accounts signed without a CFO or Company Secretary, and promoter pledges rising to 34.4% while promoter shareholding fell 3.67 percentage points. The risk is not hidden, it sits in the gap between reported profit and cash, in the related-party approvals that reach 162% of turnover, and in the borrowing limits being raised toward a projected ₹300-350 crore addition. Watch the FY2025-26 audit report and the shareholder votes on the auditor and RPT resolutions.